Bitcoin Lifetime Analysis → Reverse to $20,000 Before New Highs?
Bitcoin broke out of it's trading range between $25,000 and $32,000 and touched $44,800! Does this mean we're going to new all-time highs? I'm skeptical for a parade of reasons, all of which are based on historical and current data points. Let's dig in!
How do we trade this? 🤔
Recent Data
Since the trend reversal in January 2023 we've had three pushes to the upside, which is a textbook leg count before the trend converts into a trading range. The RSI has also been over 70.00 since October 2023 and the Daily candles leading up to December 4th 2023 could be the exhaustion bars at the end of the bull trend. This is enough evidence to warrant a pull back, likely to the top of the trading range around $32,000.
Historical Data
When are we going to see new all-time highs? Refer to the Monthly chart above. We can see that prior to hitting 3 of the 4 new all-time high events, Bitcoin will make contact with Lifetime Support. The one exception was the 2013 all-time high. Another data point is the Bitcoin halving has occurred prior to *every* new all-time high.
There is one more clue in the Weekly chart to observe! Look at the 2019 high, looks very similar to where we are now: Double-bottom reversal before touching Lifetime Support on Feb 2019, three pushes to the upside hitting the 2019 high, RSI over 70.00, price failed to break the 2019 high then capitulated to Lifetime Support, Bitcoin Halving happened shortly after, THEN went to new all-time highs.
I believe this is the situation we're in right now. If we don't make contact with Lifetime Support, I believe we need to at least come back down into the trading range before hitting new all-time highs. We also have the Bitcoin halving happening in the April 2024 area, all seems conveniently timed based on what we've discussed here!
Trade Options
There are many ways to trade this:
1. Fading your position down to lifetime support: Longing support areas as the price falls, starting with smaller positions and increasing your entry at every level.
2. Waiting for a bounce at lifetime support or in the trading range: Playing the reversal, which includes not entering until you see a reversal signal then you enter with a larger position.
3. Scalp your positions with higher probability of profit, but less profit and more risk in your Risk/Reward Ratio.
To strike a balance between Risk, Reward, and Probability, I'll stick with a standard Reversal Entry, which means we wait for a reversal confirmation. Based on this analysis, we should look to enter after a Lifetime Support or Trading Range bounce around $25,000. Enter in this price area, place a protective stop below the last bear run low at $15,000. Take profit areas are based on previous resistance and the projected lifetime resistance range of $120,000 and $130,000. The first take profit is at the price we just hit around $45,000, the next take profit should be just before the current all-time high around $65,000, the final take profit should be below the projected new all-time high somewhere in the $120,000 and $130,000 area, around $105,000. You could add more take profit areas between $65,000 and $105,000 based on lower timeframe analysis, but we don't have that data yet.
More updates will be provided as the months go by. Let me know your thoughts!
💡 Trade Idea 💡
Long Entry: $30,000
🟥 Stop Loss: $15,000
✅ Take Profit #1: $45,000
✅ Take Profit #2: $65,000
✅ Take Profit #2: $105,000
⚖️ Risk/Reward Ratio: 1:5
🔑 Key Takeaways 🔑
1. Bullish since January 2023. This is not *THE* bull run.
2. Bull Breakout of $25,000 to $32,000 Trading Range, but RSI overbought.
3. Every New All-Time high was Preceded by Touching Lifetime Support.
4. Bitcoin has not Touched Lifetime Support. Pullback to $20,000 Area.
5. RSI is above 70.00, Supports Pullback.
⚠️ Risk Warning! ⚠️
Past performance is not necessarily indicative of future results. You are solely responsible for your trades. Trade at your own risk!
Like 👍 and comment if you found this analysis useful!
How do we trade this? 🤔
Recent Data
Since the trend reversal in January 2023 we've had three pushes to the upside, which is a textbook leg count before the trend converts into a trading range. The RSI has also been over 70.00 since October 2023 and the Daily candles leading up to December 4th 2023 could be the exhaustion bars at the end of the bull trend. This is enough evidence to warrant a pull back, likely to the top of the trading range around $32,000.
Historical Data
When are we going to see new all-time highs? Refer to the Monthly chart above. We can see that prior to hitting 3 of the 4 new all-time high events, Bitcoin will make contact with Lifetime Support. The one exception was the 2013 all-time high. Another data point is the Bitcoin halving has occurred prior to *every* new all-time high.
There is one more clue in the Weekly chart to observe! Look at the 2019 high, looks very similar to where we are now: Double-bottom reversal before touching Lifetime Support on Feb 2019, three pushes to the upside hitting the 2019 high, RSI over 70.00, price failed to break the 2019 high then capitulated to Lifetime Support, Bitcoin Halving happened shortly after, THEN went to new all-time highs.
I believe this is the situation we're in right now. If we don't make contact with Lifetime Support, I believe we need to at least come back down into the trading range before hitting new all-time highs. We also have the Bitcoin halving happening in the April 2024 area, all seems conveniently timed based on what we've discussed here!
Trade Options
There are many ways to trade this:
1. Fading your position down to lifetime support: Longing support areas as the price falls, starting with smaller positions and increasing your entry at every level.
2. Waiting for a bounce at lifetime support or in the trading range: Playing the reversal, which includes not entering until you see a reversal signal then you enter with a larger position.
3. Scalp your positions with higher probability of profit, but less profit and more risk in your Risk/Reward Ratio.
To strike a balance between Risk, Reward, and Probability, I'll stick with a standard Reversal Entry, which means we wait for a reversal confirmation. Based on this analysis, we should look to enter after a Lifetime Support or Trading Range bounce around $25,000. Enter in this price area, place a protective stop below the last bear run low at $15,000. Take profit areas are based on previous resistance and the projected lifetime resistance range of $120,000 and $130,000. The first take profit is at the price we just hit around $45,000, the next take profit should be just before the current all-time high around $65,000, the final take profit should be below the projected new all-time high somewhere in the $120,000 and $130,000 area, around $105,000. You could add more take profit areas between $65,000 and $105,000 based on lower timeframe analysis, but we don't have that data yet.
More updates will be provided as the months go by. Let me know your thoughts!
💡 Trade Idea 💡
Long Entry: $30,000
🟥 Stop Loss: $15,000
✅ Take Profit #1: $45,000
✅ Take Profit #2: $65,000
✅ Take Profit #2: $105,000
⚖️ Risk/Reward Ratio: 1:5
🔑 Key Takeaways 🔑
1. Bullish since January 2023. This is not *THE* bull run.
2. Bull Breakout of $25,000 to $32,000 Trading Range, but RSI overbought.
3. Every New All-Time high was Preceded by Touching Lifetime Support.
4. Bitcoin has not Touched Lifetime Support. Pullback to $20,000 Area.
5. RSI is above 70.00, Supports Pullback.
⚠️ Risk Warning! ⚠️
Past performance is not necessarily indicative of future results. You are solely responsible for your trades. Trade at your own risk!
Like 👍 and comment if you found this analysis useful!
-Joe Dean
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